We’ve all heard stories about how hard it is to find – let alone afford – housing in cities like New York or San Francisco. When demand far outstrips available properties in a given area, costs artificially rise and it becomes common for many people to be forced to travel to the suburbs to find accommodation, only to be stuck on long one-way commutes. back to work every day.
In a normal market there is usually a six month supply of homes. While we typically think of huge metropolitan areas like the aforementioned cities when considering housing shortages, the truth is that a housing shortage can occur anywhere and in any type of market. All it takes is a local issue, like strict zoning laws — or a major event, like a global pandemic — to cause a housing shortage.
A perfect storm of pandemic factors since 2020, including record high mortgage rates and greater mobility for remote workers, has caused widespread housing shortages in busy metropolitan areas like Los Angeles to small towns in the center of the ‘Indiana or Michigan. Supply chain issues, lack of labor and shortages of building materials have exacerbated the problem. The housing shortage has led buyers and investors to pull out all the stops to land housing deals, making the market even more competitive. Sellers, on the other hand, reap the benefits of getting multiple offers against the asking price.
While nearly every city in the country has faced some sort of housing crisis over the past year, the 20 metro areas facing the biggest housing shortages today might surprise you. Roofstock used September 2021 metropolitan data from the U.S. Census Bureau Building Permit Survey and the Bureau of Labor Statistics Employment Dataset to calculate the number of new single-family housing permits issued by compared to the number of new jobs created in the space of a year, between August 2020 and August 2021. Metropolitan areas are ranked according to their job-to-housing permit ratio, with a higher ratio meaning that job creation in the region greatly exceeds the supply of new housing. Only areas with a total employment of 100,000 or more were considered for this list.